Welcome to GCT Property’s property market update for 2022.
It’s been a big year and there have been a lot of changes in the property market, so I think now is a really good time to reflect on what has happened in Brisbane for the last 12 months. Also, going forward, what’s going to happen over the next few years.
Property Market Review 2022
Brisbane’s house prices have increased 7.4% annually over the last 12 months and 36.5% since 2019, which is massive.
We have seen in the last few months a bit of a decline and property prices have clawed back a bit, but the last 12 months have performed well above the long-term average.
We need to remember that property investment is for the long term, none of us know when we are at the bottom or the top of the market until it has passed.
Over the last 12 months in Brisbane, we have seen rental income increase by 13.6% which is great for cash flow.
We have also seen dramatic interest rate rises over the last six months. This has really affected our cash flow.
On the positive side to help overcome these rate increases is the increased rental demand with vacancy rates running about 0.8% in Brisbane currently as there’s a real shortage of rental accommodation.
Listening to the RBA and speaking to a lot of banking experts and finance specialists, they are expecting the rental market only to get tighter, and that’s going to push up rents for the long term.
It is forecast for another few rate rises before the market will start to flatten off which is good news for property investors.
Previously we’ve paid 10% – 20% for interest rates on property prices, but that long-term growth has still been very strong over those higher interest rates.
I think it’s just been a bit of a shock this year because we’ve seen historically low rates.
Property Market 2023 and Beyond
I think the market currently has slowed down a bit. There are certainly fewer buyers around, and a lot of people are a bit unsure, but I actually think it’s a really good time to get into the market.
There are more buying opportunities. I have been looking at some development sites for clients and being able to secure some great properties at prices that we haven’t seen for some time.
I believe there is a bit of a window of opportunity to get in before that next market growth.
So why do we think property prices are going to grow over the next few years?
The Australian government has recently approved 195,000 Visa applications Australia wide for next year.
Now even if only a hundred thousand of those take up those applications, that’s a massive growth and need for property in Australia and most of that population growth will go to the major capital cities.
There is going to be a lot of pressure on rental demand in Brisbane, Melbourne, and Sydney that is only going to accelerate the vacancy rate and it’s going to push up the rental income for sure.
Brisbane’s got the Olympic Games in 2032. And we’re already starting to see people talk about that.
So how is that going to affect the property market?
We only need to go back to the year 2000 when Sydney hosted the Olympic Games and saw that was the start of the price growth in Sydney. It put Sydney on the worldwide map.
We are having to create a lot of infrastructure, accommodation, villages, and sporting venues. They’ll all have to be expanded and improved to cater for the Olympic Games. And to build those facilities we are going to need workers to come into the state.
We know that the unemployment rates in Brisbane, like most of Australia, are at historically low levels.
There are simply not enough workers to satisfy the job demand. If more of these workers come to Brisbane they will have to buy or rent a property somewhere. So, it’s great news for the overall property market in Brisbane.
We are seeing a lot of overseas migration, not only next year, but over the next few years as our international borders have opened up.
It is forecast that the Australian population will grow by about 3 million by 2030 in eight years’ time, which is huge.
Brisbane’s population is projected to grow by 400,000 by 2030 and greater Brisbane by 1 million.
These regional cities bordering on the Brisbane city are going to see growth as it’s more affordable housing and we simply don’t have enough land in the Brisbane region.
For anyone looking to invest or get into their own home, I suggest the sooner you can do that the better based on the forecast growth.
Have a Merry Christmas and Happy New Year. We will be taking a well-earned break from Wednesday 21 December and will be back early January.
Regards,
Geoff Tomkins
Buyers Advocate
PH: 0404 852 781
